Herbalife Nutrition Ltd. (HLF) Bundle
A Brief History of Herbalife Nutrition Ltd.
Company Overview
Herbalife Nutrition Ltd. is a global nutrition company that sells dietary supplements and personal care products. Founded in 1980, the company has established a significant presence in over 90 countries worldwide.
Financial Performance (2024)
As of September 30, 2024, Herbalife reported net sales of $1,240.3 million for the third quarter and $3,785.7 million for the nine months ended September 30, 2024. This reflects a decrease of $41.0 million (3.2%) and $61.7 million (1.6%) compared to the same periods in 2023. In local currency, net sales decreased 0.3% and increased 0.8% for the three and nine months ended September 30, 2024, respectively.
| Period | Net Sales (in millions) | Change from Previous Year (%) |
|---|---|---|
| Q3 2024 | $1,240.3 | -3.2 |
| 9M 2024 | $3,785.7 | -1.6 |
Net Income
Net income for the three months ended September 30, 2024, was $47.4 million, or $0.46 per diluted share. For the nine months, net income was $76.4 million, or $0.75 per diluted share. This represents an increase of $4.6 million (10.7%) for the third quarter but a decrease of $55.6 million (42.1%) for the nine months compared to 2023.
Expenses and Costs
For the three months ended September 30, 2024, selling, general, and administrative expenses were $444.0 million, down from $455.3 million in 2023. For the nine months, these expenses rose to $1,438.5 million from $1,391.7 million in the prior year.
| Type | Q3 2024 (in millions) | Q3 2023 (in millions) | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|---|---|
| Net Income | $47.4 | $42.8 | $76.4 | $132.0 |
| Selling, General & Admin Expenses | $444.0 | $455.3 | $1,438.5 | $1,391.7 |
Sales by Geographic Region
Sales in key regions as of September 30, 2024, are as follows:
| Region | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | Change (%) |
|---|---|---|---|
| North America | $260.4 | $277.8 | -6.3 |
| Latin America | $207.1 | $212.0 | -2.3 |
Volume Points
For the three months ended September 30, 2024, Volume Points decreased by 5.4% compared to the same period in 2023.
Debt and Interest Rates
As of September 30, 2024, Herbalife had a total long-term debt of $2,261.2 million, with a weighted-average interest rate of 10.05% for borrowings under the 2024 Credit Facility.
| Debt Type | Carrying Value (in millions) |
|---|---|
| Senior Secured Credit Facility | $363.4 |
| 12.250% Senior Secured Notes | $766.9 |
| Convertible Senior Notes due 2024 | $0.0 |
| Convertible Senior Notes due 2028 | $271.5 |
| Senior Notes due 2025 | $261.6 |
| Senior Notes due 2029 | $595.1 |
Cash Flow
For the nine months ended September 30, 2024, Herbalife generated $215.8 million in operating cash flow, a decrease from $261.4 million in 2023.
| Cash Flow Type | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|
| Operating Cash Flow | $215.8 | $261.4 |
Capital Expenditures
Capital expenditures for the nine months ended September 30, 2024, were $83.6 million, down from $99.8 million in 2023.
| Expenditure Type | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|
| Capital Expenditures | $83.6 | $99.8 |
Market Conditions
Herbalife continues to navigate a challenging macroeconomic environment characterized by high inflation and foreign exchange rate fluctuations.
A Who Owns Herbalife Nutrition Ltd. (HLF)
Major Shareholders
As of 2024, Herbalife Nutrition Ltd. has a diverse ownership structure comprising institutional investors and individual shareholders. The largest institutional shareholders include:
| Institution | Shares Owned (millions) | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 11.2 | 11.1% |
| The Vanguard Group, Inc. | 10.5 | 10.4% |
| State Street Corporation | 8.0 | 7.9% |
| Wellington Management Group LLP | 6.5 | 6.4% |
| Invesco Ltd. | 5.2 | 5.1% |
Executive Ownership
Executive officers and directors also hold a significant stake in Herbalife Nutrition Ltd. Their ownership details are as follows:
| Executive/Director | Shares Owned (millions) | Percentage of Total Shares |
|---|---|---|
| Michael O. Johnson (Executive Chairman) | 4.0 | 3.9% |
| John D. Agwunobi (CEO) | 2.5 | 2.5% |
| Other Executive Officers | 3.0 | 3.0% |
Recent Changes in Ownership
In 2024, Herbalife has seen fluctuations in its shareholder base, with significant institutional buying and selling activity. Notably:
- BlackRock increased its stake by 1.2 million shares in the last quarter.
- Vanguard's holdings decreased by 0.5 million shares over the same period.
- Insider trading revealed that several executives purchased shares in anticipation of positive earnings reports.
Market Capitalization and Share Performance
As of September 30, 2024, Herbalife's market capitalization stands at approximately $1.2 billion, with shares trading at around $11.90. The stock has experienced a decline of approximately 20% year-to-date, influenced by both market conditions and company performance metrics.
| Metric | Value |
|---|---|
| Market Capitalization (in billions) | $1.2 |
| Current Share Price | $11.90 |
| Year-to-Date Share Performance | -20% |
Conclusion of Ownership Structure
The ownership structure of Herbalife Nutrition Ltd. is characterized by a mixture of institutional investors and management, reflecting a balanced approach to corporate governance and shareholder engagement. The company continues to engage with its shareholders through regular communications and updates on strategic initiatives.
Herbalife Nutrition Ltd. (HLF) Mission Statement
Herbalife Nutrition Ltd. focuses on providing high-quality nutritional products to its members and customers, emphasizing health and wellness. The mission statement articulates the company’s commitment to enhancing the lives of people by providing effective nutritional solutions and fostering a supportive community.
Current Mission Statement
As of 2024, Herbalife’s mission statement emphasizes the following principles:
- Empowerment: Empowering individuals to pursue their health and wellness goals through a range of nutritional products.
- Community: Building a supportive community among its members to facilitate success and personal growth.
- Innovation: Continuously innovating to provide the best possible products and services to meet consumer needs.
Financial Overview
In 2024, Herbalife's financial health reflects the impact of its mission on sales and member engagement:
| Financial Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Sales (in millions) | $1,240.3 | $1,281.3 | (3.2%) |
| Gross Profit (in millions) | $971.6 | $978.1 | (0.6%) |
| Net Income (in millions) | $76.4 | $132.0 | (42.3%) |
| Operating Cash Flow (in millions) | $215.8 | $261.4 | (17.4%) |
Regional Sales Performance
The mission of Herbalife is reflected in its sales across various regions, indicating member engagement and product effectiveness:
| Region | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | % Change |
|---|---|---|---|
| North America | $260.4 | $277.8 | (6.3%) |
| Latin America | $207.1 | $212.0 | (2.3%) |
| EMEA | $261.9 | $261.0 | 0.3% |
| Asia Pacific | $436.1 | $441.0 | (1.1%) |
| China | $74.8 | $89.5 | (16.4%) |
Product Categories and Sales
Herbalife’s product offerings are crucial to its mission. The following table illustrates sales across product categories:
| Product Category | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | % Change |
|---|---|---|---|
| Weight Management | $689.7 | $723.7 | (4.7%) |
| Targeted Nutrition | $366.6 | $371.8 | (1.4%) |
| Energy, Sports, and Fitness | $142.2 | $143.5 | (0.9%) |
| Outer Nutrition | $21.0 | $20.2 | 4.0% |
| Literature, Promotional, and Other | $20.8 | $22.1 | (5.9%) |
Strategic Initiatives Aligned with Mission
Herbalife continues to invest in various initiatives to support its mission:
- Digital Technology Program: A $400 million initiative aimed at enhancing member tools and improving customer experiences.
- Transformation Program: Expected to deliver annual savings of approximately $110 million, with pre-tax expenses of about $90 million to achieve these savings.
- Restructuring Program: Aims to streamline operations, with expected savings of at least $80 million annually beginning in 2025.
These initiatives reflect Herbalife's dedication to its mission of empowering individuals and fostering community engagement through effective nutrition solutions.
How Herbalife Nutrition Ltd. (HLF) Works
Overview of Herbalife Nutrition Ltd.
Herbalife Nutrition Ltd. operates as a global nutrition company selling weight management, nutritional supplements, and personal care products. The company primarily sells its products through a network of independent distributors. As of September 30, 2024, Herbalife reported a net income of $76.4 million for the nine months ended, down from $132.0 million in the same period of the prior year.
Financial Performance
For the three months ended September 30, 2024, Herbalife reported net sales of $1,240.3 million, a decrease of 3.2% compared to $1,281.3 million for the same period in 2023. For the nine months, net sales were $3,785.7 million, down 1.6% from $3,847.4 million in the prior year.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Net Sales | $1,240.3 million | $1,281.3 million | (3.2%) | $3,785.7 million | $3,847.4 million | (1.6%) |
| Net Income | $47.4 million | $42.8 million | 10.7% | $76.4 million | $132.0 million | (42.1%) |
| Earnings per Share (Diluted) | $0.46 | $0.43 | 7.0% | $0.75 | $1.32 | (43.3%) |
Sales by Geographic Region
Herbalife's net sales varied significantly across different regions. The performance highlights for the three months ended September 30, 2024 are detailed below:
| Region | Q3 2024 Sales (millions) | Q3 2023 Sales (millions) | Change (%) | 9M 2024 Sales (millions) | 9M 2023 Sales (millions) | Change (%) |
|---|---|---|---|---|---|---|
| North America | $260.4 | $277.8 | (6.3%) | $809.4 | $878.6 | (7.9%) |
| Latin America | $207.1 | $212.0 | (2.3%) | $633.0 | $624.5 | 1.4% |
| EMEA | $261.9 | $261.0 | 0.3% | $827.6 | $818.7 | 1.1% |
| Asia Pacific | $436.1 | $441.0 | (1.1%) | $1,284.0 | $1,280.4 | 0.3% |
| China | $74.8 | $89.5 | (16.4%) | $231.7 | $245.2 | (5.5%) |
Product Category Performance
Herbalife's sales are categorized into several segments, with the following performance metrics for the three months ended September 30, 2024:
| Product Category | Q3 2024 Sales (millions) | Q3 2023 Sales (millions) | Change (%) | 9M 2024 Sales (millions) | 9M 2023 Sales (millions) | Change (%) |
|---|---|---|---|---|---|---|
| Weight Management | $689.7 | $723.7 | (4.7%) | $2,105.1 | $2,172.8 | (3.1%) |
| Targeted Nutrition | $366.6 | $371.8 | (1.4%) | $1,122.9 | $1,116.4 | 0.6% |
| Energy, Sports, and Fitness | $142.2 | $143.5 | (0.9%) | $430.1 | $426.6 | 0.8% |
| Outer Nutrition | $21.0 | $20.2 | 4.0% | $61.9 | $62.5 | (1.0%) |
| Literature, Promotional, and Other | $20.8 | $22.1 | (5.9%) | $65.7 | $69.1 | (4.9%) |
Operational Metrics
Herbalife's operational performance is measured through Volume Points, which represent the sales volume generated by Members. The Volume Points decreased by 5.4% for the three months ended September 30, 2024, and by 5.0% for the nine months ended.
Cost Structure
Herbalife's cost structure includes selling, general, and administrative expenses (SG&A) and royalty overrides. For Q3 2024:
| Cost Type | Q3 2024 (millions) | Q3 2023 (millions) | Change (%) | 9M 2024 (millions) | 9M 2023 (millions) | Change (%) |
|---|---|---|---|---|---|---|
| Selling, General, and Administrative Expenses | $444.0 | $455.3 | (2.9%) | $1,438.5 | $1,391.7 | 3.4% |
| Royalty Overrides | $405.5 | $416.1 | (2.7%) | $1,236.0 | $1,261.8 | (2.0%) |
Cash Flow and Capital Expenditures
Herbalife’s operating cash flow for the nine months ended September 30, 2024, was $215.8 million, down from $261.4 million in the same period of 2023. Capital expenditures for the same period were $83.6 million.
Market Challenges and Strategic Initiatives
Herbalife faces challenges such as fluctuating foreign currency rates, decreased Volume Points, and economic conditions impacting sales in various regions. To counter these challenges, the company has focused on enhancing Member training, launching new products, and improving technological tools.
How Herbalife Nutrition Ltd. (HLF) Makes Money
Revenue Streams
Herbalife Nutrition Ltd. generates revenue primarily through the sale of nutritional products, which include weight management, targeted nutrition, energy and sports nutrition, outer nutrition, and promotional literature. The company operates a direct selling model, relying on independent distributors to market and sell its products.
| Product Category | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | % Change (Q3 2024 vs Q3 2023) | 9M 2024 Revenue (in millions) | 9M 2023 Revenue (in millions) | % Change (9M 2024 vs 9M 2023) |
|---|---|---|---|---|---|---|
| Weight Management | $689.7 | $723.7 | (4.7%) | $2,105.1 | $2,172.8 | (3.1%) |
| Targeted Nutrition | $366.6 | $371.8 | (1.4%) | $1,122.9 | $1,116.4 | 0.6% |
| Energy, Sports, and Fitness | $142.2 | $143.5 | (0.9%) | $430.1 | $426.6 | 0.8% |
| Outer Nutrition | $21.0 | $20.2 | 4.0% | $61.9 | $62.5 | (1.0%) |
| Literature, Promotional, and Other | $20.8 | $22.1 | (5.9%) | $65.7 | $69.1 | (4.9%) |
Net Sales Data
For the three months ended September 30, 2024, Herbalife reported net sales of $1,240.3 million, marking a decrease of $41.0 million or 3.2% from the same period in 2023. For the nine months ended September 30, 2024, net sales totaled $3,785.7 million, a decrease of $61.7 million or 1.6% compared to the previous year.
| Geographic Region | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | % Change (Q3 2024 vs Q3 2023) | 9M 2024 Net Sales (in millions) | 9M 2023 Net Sales (in millions) | % Change (9M 2024 vs 9M 2023) |
|---|---|---|---|---|---|---|
| North America | $260.4 | $277.8 | (6.3%) | $809.4 | $878.6 | (7.9%) |
| Latin America | $207.1 | $212.0 | (2.3%) | $633.0 | $624.5 | 1.4% |
| EMEA | $261.9 | $261.0 | 0.3% | $827.6 | $818.7 | 1.1% |
| Asia Pacific | $436.1 | $441.0 | (1.1%) | $1,284.0 | $1,280.4 | 0.3% |
| China | $74.8 | $89.5 | (16.4%) | $231.7 | $245.2 | (5.5%) |
Cost Structure and Profit Margins
Herbalife’s gross profit for Q3 2024 was $971.6 million, representing a gross profit margin of 78.3%. For the nine months ended September 30, 2024, gross profit was $2,948.9 million, with a gross profit margin of 77.9%. The increase in gross profit margin is attributed to favorable cost changes related to self-manufacturing and sourcing, and price increases.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit (in millions) | $971.6 | $978.1 | $2,948.9 | $2,944.0 |
| Gross Profit Margin | 78.3% | 76.3% | 77.9% | 76.5% |
| Royalty Overrides (in millions) | $405.5 | $416.1 | $1,236.0 | $1,261.8 |
| Selling, General, and Administrative Expenses (in millions) | $444.0 | $455.3 | $1,438.5 | $1,391.7 |
Net Income
Herbalife reported a net income of $47.4 million, or $0.46 per diluted share, for Q3 2024, compared to a net income of $76.4 million, or $0.75 per diluted share, for the same period in 2023. For the nine months ended September 30, 2024, net income was $76.4 million, a decrease of 42.1% compared to the previous year.
| Measurement | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income (in millions) | $47.4 | $76.4 | $76.4 | $132.0 |
| Net Income per Diluted Share | $0.46 | $0.75 | $0.75 | $1.32 |
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Article updated on 8 Nov 2024
Resources:
- Herbalife Nutrition Ltd. (HLF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Herbalife Nutrition Ltd. (HLF)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Herbalife Nutrition Ltd. (HLF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.